Trouble in paradise: husband fails to hide assets from wife
By:0 commentsNovember 14, 2017
The whole question of salting money away in offshore accounts is topical once again. It is therefore appropriate that a family case in which this was an issue popped up the other day, even though the decision, in its final form, was actually handed down last February.
Reading the first sixteen paragraphs of His Honour Judge Booth’s judgment in J v J suggest that it was a fairly straightforward financial remedies claim by the wife. The parties had been married for sixteen years. They had three children, who lived with the wife in the former matrimonial home. The husband lived in another property they owned. The two properties have an equity of £315,000.
The husband also has a collection of watches worth some £20,000.
The wife ran a beauty salon, from which she earned the very modest sum of £50 per week. The husband is the managing director of a company in which he owns a 35 per cent share, and from which he draws £10,000 a month. His shares in the business have been valued at £860,000. The husband also has an interest in another company that owes him £27,500.
The husband has a pension with a cash equivalent value of £75,000. The wife has no pension.
The ‘balance sheet’ therefore seemed quite simple, as Judge Booth summarised: “Houses and watches: £335,000; Business assets: £887,500; Pensions: £75,000.”
But things weren’t actually straightforward at all. It was the wife’s contention that the husband had funds in a Cayman Islands bank account generated by the activities of his principle business. The events leading to the identification of the account were quite remarkable. Judge Booth explains:
“Seemingly confident that it would reveal nothing to his detriment [the husband] signed a form of authority to allow those acting for Mrs J to make enquiries of banks in the Cayman Islands to see whether there was any account associated with Mr J’s name. To the surprise of those acting for Mrs J the Royal Bank of Canada (Grand Cayman) revealed that there was such an account.”
This came to light at a late stage in the proceedings. Needless to say, the husband’s failure to disclose the account did him no favours in the eyes of the court. He claimed that he was just a signatory to the account, and that the money in the account all belonged to a business associate. The wife challenged that argument, and the matter was left to Judge Booth to decide.
Judge Booth found in favour of the wife. I’ll not go into the details of his reasoning, but his main finding was that the husband was “a most unimpressive witness” who had made a concerted effort to try to prevent the court getting to the truth and to try to persuade the court that the wife was lying, when throughout Judge Booth was satisfied it was the husband that was being untruthful. He concluded:
“I could go on at great length. Mr Cole [the wife’s counsel] very helpfully provided me with closing submissions setting out a long list of reasons why the funds in the Cayman Islands account were in reality, at least in part, the funds of the husband. I am satisfied that all of the points made by Mr Cole are fair and accurate and I adopt every one of them.”
Accordingly, he found that the husband had money in the Cayman Islands account, to which he attributed a value of £380,000.
The first result of these findings was that Judge Booth accepted the wife’s proposals in full, rather than the husband’s proposals which took no account of the Cayman Islands money and would therefore have left the husband with the ‘vast bulk’ of the parties’ wealth.
The second result of the findings was that the husband was ordered to pay the sum of £40,000 towards the additional legal costs incurred by the wife as a result of the husband’s litigation misconduct.
You can read the full report of J v J here.
Photo by Ray Bodden via Flickr
November 14, 2017
Categories: Finances and Divorce